Alex Callinicos

End of hard reign?

(May 1989)

THE CEREMONIES surrounding the tenth anniversary of Margaret Thatcher’s accession to power on 4 May 1979 have tended to reinforce the dominant image of the woman – as a kind of human juggernaut, malevolent, relentlessly successful and unstoppable.

On the left, this view has long been dressed up by Stuart Hall and the other luminaries of Marxism Today in the theory of “authoritarian populism”. This states that Thatcherism represents a new form of political rule, which has dispensed with the niceties of bourgeois democracy and relies instead on a combination of repression and direct ideological appeal to sections of the working class.

Both the image and the analyses which seek to justify it are, however, false. The Thatcher government has, since its inception, been crisis ridden, victorious often by accident or because of its opponents’ weaknesses and divisions. This can be best brought out by considering the government’s history. Four phases can be distinguished, each reflecting both the economic situation and the state of the class struggle.

The first period, that of 1979–83, began with Thatcher’s entry to Ten Downing Street. She had won the Conservative leadership in 1975 as the candidate of the party faction advocating class struggle Toryism. In reaction to the great struggles of the early 1970s which had brought down the government of Edward Heath, they proposed a ruling class offensive to shift the balance of forces back in capital’s favour and to drive up the rate of profit.

Ideologically this was justified by a return to traditional economic liberalism in a variant summed up by Hall’s formula: “Free economy, strong state”. Government intervention in the economy should be drastically reduced and the market left to find its own level. At the same time the traditional values of family and nation were invoked to legitimise strengthening the repressive state apparatus.

The strength of working class organisation revealed by the struggles of the early 1970s made this a high risk strategy. The bulk of the ruling class was indeed content after Heath’s fall to rely on the class collaboration embodied in the Social Contract between the Labour government of 1974–9 and the Trade Union Congress. But this arrangement fell apart during the Winter of Discontent of 1978–9 when rank and file opposition to Labour’s incomes policy finally found expression in a series of major strikes.

The collapse of the Social Contract made the Thatcherite alternative more credible. At the same time, the erosion of shop stewards’ organisation by five years of class collaboration meant that Thatcher had to face a weaker workers’ movement than that which had brought down Heath.

The new government nevertheless proceeded cautiously. This reflected both its fear of the considerable power the unions retained, and the divisions within a cabinet only two of whose members had voted for Thatcher in 1975.

Senior ministerial positions were dominated largely by the wets, who remained committed to the post war orthodoxy of state intervention and collaboration with the union bureaucracy. The Thatcherites were concentrated chiefly in economic posts of which the most important was the Treasury, presided over by Sir Geoffrey Howe.

Their most powerful weapon was the indirect one of mass unemployment. Unemployment soared from 1.2 million in May 1979 to well over 3 million four years later. The effects of the global slump of 1979–82 were exacerbated in Britain by the government’s policy of forcing up interest rates, which (together with the impact of the North Sea oil) kept the pound high on the foreign exchanges. Large sections of manufacturing industry were thus rendered uncompetitive and 2.5 million jobs disappeared in three years.

This industrial holocaust allowed management to remove militants either by closing troublesome plants or by selective victimisation.

More generally, the government pursued the strategy drawn up by Nicholas Ridley while the Tories were in opposition. Certain groups of workers – above all the power workers – were to be bought off. Others, the miners and dockers for example, were to be left alone for the moment, while weaker or less militant sections were picked off and defeated – the steel workers in 1980, the civil servants in 1981, rail and hospital workers in 1982.

In all these cases – but above all in the steel strike, much the most serious confrontation of this period – the trade union bureaucracy played a crucial role in securing defeat. Even the “left” miners’ and transport workers’ leaders allowed their members to handle scab steel.

Nevertheless, the government’s caution during this period is very striking. Trade union law was tightened up, but through a series of piecemeal changes. The first instalment was the 1980 Employment Act, steered through by arch wet Jim Prior.

His aim was to avoid offering the kind of highly visible target provided by Heath’s Industrial Relations Act, which had tried to force the unions to register under the law and set up a special court. Thatcher herself showed similar caution when she abandoned proposed pit closures which, in February 1981, threatened to provoke a national miners’ strike. But coal stocks were built up in line with the Ridley Plan. The retreat was only temporary.

Part of Thatcher’s problem was to secure her own position within a deeply divided government. The severity of the recession provoked considerable opposition to Tory policies from within the ruling class. The strength of the pound infuriated the Confederation of British Industry.

Within the government itself, Prior led the wets in a series of skirmishes against Thatcher and her Chancellor of the Exchequer. Moreover, the Prime Minister herself was deeply unpopular.

In 1980–1 the Labour leader, Michael Foot, led a series of mass demonstrations against unemployment which indicated the scale of working class hostility to Thatcher. An opinion poll published in December 1981 showed that only 23 percent of the electorate thought she was doing a good job.

And yet in June 1983 Thatcher was triumphantly re-elected. A series of factors made this possible.

First, the wets were internally divided and lacked a coherent alternative to Thatcherite economic policy. Their greatest victory came in July 1981 when they blocked Howe’s plans for a further bout of public spending cuts. In September Thatcher moved against them firing, among others, the outspoken Sir Ian Gilmour and transferring Prior, in humiliating circumstances, to the political backwater of Northern Ireland.

In 1981 Thatcher’s political position strengthened outside the Tory party as well. In April, Labour right wingers broke away to form the Social Democratic Party and allied themselves to the Liberals. By splitting the opposition they allowed the Tories to exploit the peculiarities of the “first past the post” electoral system, which means that when three parties are competing the one with the largest share of the votes is likely to win a very large majority of seats.

The June 1983 Tory “landslide” actually represented a smaller share of the votes than the party had won in 1979 – 40 and 42 percent respectively.

Also working in the Tories’ favour was the economic situation. In 1981–2 the economy began painfully to climb out of the deep trough of the recession. Real earnings, which had been sharply squeezed, started to rise. This reflected the fact that workers’ organisation hadn’t been broken and that employers were therefore under pressure to buy peace on the shop floor. Rising living standards helped to improve the political climate for the Tories.

Finally, there was the Falklands War. Rather than producing the Tory recovery, the British recapture of the Falklands reinforced a process already under way. The Tory share in opinion polls was already rising before the war broke out.

The dispatch of the task force to the South Atlantic was an enormous risk for Thatcher. If she hadn’t sent it, she would have fallen within days. Had the British lost – and the war was, as Wellington said at Waterloo, a damn’d close run thing – Thatcher could not have survived. Success, however, strengthened her national standing and allowed her to ride rough shod over the wets, firing foreign secretary Francis Pym after the election, replacing him with the loyal Howe, and putting another Thatcherite, Nigel Lawson, in charge of the Treasury.

However, this did not mean that Thatcher’s political success reflected the reversal of British capitalism’s decline. The cover of the Economist the week after the June 1983 election carried a picture of Thatcher accompanied by the injunction: “Now Govern”. The previous winter the magazine had calculated real wages would need to be cut by 19 percent to restore the rate of profit to its mid-1960s level.

Instead, in Thatcher’s first term, earnings had risen 13 percent faster than prices. The time had come to deliver some of the results the Economist had demanded on behalf of big business.

Thatcher seems to have got the message. The second phase of her government, between 1983 and 1985, was characterised by a determined offensive against some of the most entrenched strongholds of working class power. It came at a moment marked by some recovery in militancy – 1983–4 saw a number of major disputes in the car industry, for example. The Tory offensive encompassed the successful use of the Employment Act against the NGA printers’ union at Warrington and the suppression of unions at GCHQ, but its climax was, of course, the Great Miners’ Strike of 1984–5.

The strike was another close run thing. The government, in provoking the dispute over pit closures, hadn’t calculated on the incredible determination and powers of endurance of the mining communities, especially in militant areas such as Yorkshire. And there was always the danger that the strike might develop into a more generalised confrontation.

This came closest to happening when the government’s scabbing operation provoked a national dock strike in July 1984. This was perhaps Thatcher’s most dangerous moment. It came when the pound and share prices were fall- and immeasurably strengthened Thatcher’s own position, insecure ever since Westland. Although the cabinet was still largely composed of time servers rather than committed Thatcherites, it pressed ahead with a generalised offensive on the social front.

Thatcher’s aim seemed to be what one of her cronies – the ineffable Cecil Parkinson – called a “cultural revolution”. British society was to be reshaped in a way that would openly and systematically favour those in the high income brackets and the holders of private wealth. Various measures reflected this offensive – for example the “reforms” of social security, schooling and the National Health Service, the introduction of the poll tax, the use of privatisation (originally simply an expedient to raise money) to widen the government’s popular base.

Unexpectedly, this produced a surge of anger among quite wide layers of the population. One reason for this growing anti-Tory mood was simply the threat that the attacks on the welfare state represented to the material position not only of workers, but of large sections of the middle classes – who are indeed relatively greater users of state services than workers.

The anger provoked by the decline of the NHS, dramatised by the nurses’ strikes of early 1988, indicated the Emits of Thatcherism’s popular appeal. Contrary to the claims of Marxism Today, the old social democratic consensus retained its hold on the mass of people, at least as far as social and economic issues were concerned. Opinion polls such as those commissioned by the annual British Social Attitudes survey showed that support for higher spending on the NHS, even at the price of higher taxation, actually grew under Thatcher. The “cultural revolution” had a long way to go.

The anger found partial expression in a number of industrial disputes in 1988, most importantly those in the NHS, the Post Office and Ford.

These and other strikes represented the beginnings of the recovery of the workers’ movement from the low point of the miners’ defeat. The limits of that revival were indicated both by its failure – thanks once again to the trade union bureaucracy – to produce any significant victories, and by the lull in the industrial struggle which followed in early 1989.

Nevertheless, the situation was moving more generally against the Tories. The 1987–8 boom, like its predecessors during the stop go cycles of the 1950s and 1960s to which Thatcher had supposedly put an end, predictably led to a sharp acceleration in the rate of inflation and to the development of an enormous balance of payments deficit – £15 billion in 1988, and probably the same this year.

The trade gap indicated the enduring weakness of Britain’s manufacturing sectors. While productivity and profitability had sharply risen over the decade, the destruction of large portions of industry in the early 1980s meant that the capacity to meet increased demand no longer existed. So higher real incomes, boosted by easy credit and tax cuts, sucked in imports.

Lawson was consequently forced within months of his triumphant tax-cutting budget of March 1988 to seek to slow down the economy by forcing up interest rates. The effect of the resulting increase in mortgage payments, combined with the general rise of the inflation rate, was to impose the first serious pressure in living standards since the early 1980s.

Added to this were the government’s growing political troubles. By early 1989 it was in the worst trouble since Westland, not so much because of one big crisis, but under the cumulative impact of a series of smaller ones, many of them reflecting the Tories’ failure to invest adequately in the country’s infrastructure.

It is idle to speculate how things will pan out for the government. Two points are, however, worth making in conclusion.

First, the Tory record shows how baseless the theory of “authoritarian populism” is. Not only have the Thatcherites failed to establish ideological hegemony, but their victories over the working class have been secured, not because of their repressive power, but thanks to the collaboration of the trade union bureaucracy.

Secondly, the Thatcher government’s ability to survive and to defeat its opponents has nothing inevitable about it. On a number of occasions it has been on the ropes. Sometimes sheer luck has allowed Thatcher to survive – had the Argentine air force used their bombs properly they would have sunk the British fleet and Thatcher along with it. The Tory government is no invulnerable monolith. Future developments – in the world economy, in politics and above all in the class struggle – can shatter it.